A US pledge to step up military aid to Syrian rebels because of alleged use of chemical arms by the regime drew criticism from Damascus ally Russia and from UN chief Ban Ki-moon on Friday.

Syria itself dismissed the accusation as "lies."

The UN secretary general said arming either side in the 27-month war, which has cost tens of thousands of lives, "would not be helpful."

Ban said he has been "consistently clear that providing arms to either side would not address this current situation. There is no such military solution."

The harder US line also dismayed Moscow, which had been working with Washington to organise a peace conference.

US data on chemical weapons was "unconvincing", it said, warning Washington against repeating the mistake it made when invading Iraq after falsely accusing Saddam Hussein of stocking weapons of mass destruction.

Top Kremlin foreign policy adviser Yury Ushakov also said the US decision to provide military aid to Syrian rebels would damage international efforts to end the conflict.

Russian President Vladimir Putin and US President Barack Obama are to meet at the G8 summit in Northern Ireland on Monday.

The US decision prompted Sweden to warn of the danger of an arms war

between rival foreign backers of the regime and the rebels.

The conflict in Syria topped the agenda in a video conference on Friday among G8 leaders ahead of next week's summit, British and French officials said.

Obama's administration announced late on Thursday that it had reviewed

intelligence reports and concluded that regime forces had used banned weapons, including sarin, in attacks that killed up to 150 people.

US officials refused to rule out moving towards arming rebels, and said Washington would provide backing to the rebel Syrian Military Council.

Britain and France, which had already said they believed the Syrian

government had resorted to using its chemical weapons stockpiles, welcomed the US announcement.

But Damascus dismissed it as "a statement full of lies" and asked how Washington could continue to be regarded as an honest broker in any UN-backed peace conference.

"The American decision to arm armed terrorist groups demonstrates...the direct involvement of the United States in the Syrian bloodbath," state news agency SANA quoted a foreign ministry official as saying.

It "raises serious questions about their good faith when it comes to finding a political solution in Syria," the official added.

The New York Times cited US officials as saying shipments to the rebels would include small arms and ammunition and anti-tank weapons, but not anti-aircraft weapons.

The Wall Street Journal said US military proposals also include a limited no-fly zone over rebel training camps that could stretch up to 40 kilometers (25 miles) into Syria from neighboring Jordan.

But incoming US national security adviser Susan Rice acknowledged there are "downsides and limitations" to imposing a no-fly zone.

Sweden warned that the US promise of military aid to the rebels risked prolonging bloodshed that the United Nations says has killed at least 93,000 people since March 2011.

"I don't think the way forward is to get an arms race going in Syria," Foreign Minister Carl Bildt told Swedish news agency TT.

Hawkish US lawmakers welcomed the administration's change in position, but Senator John McCain said the president needed to go further.

"We need heavy weaponry. We need the kind that can counter tanks, and we need surface-to-air missiles," he said.

Representatives from countries that support the Syrian opposition met in Istanbul with the SMC chief, General Selim Idriss, to discuss possible weapons deliveries, an opposition spokesman said.

Khaled Saleh, a spokeman for the opposition Syrian National Council said: "At this stage, we expect that the international community would begin to supply the SMC... with sophisticated arms, anti-tank and anti-aircraft missiles because that is what the Assad regime uses."

The US announcement came with the rebel coalition under extreme pressure on the battlefield from government forces supported by Hezbollah fighters from neighboring Lebanon.

In a televised address on Friday, Hezbollah leader Hassan Nasrallah said his group will stay involved in the conflict, after having helped the regime recapture the key town of Qusayr.

"Before Qusayr is the same as after Qusayr. Nothing has changed," he said.

In Cairo, meanwhile, thousands of Islamists rallied to express support for calls by several Sunni Muslim clerics for a holy war against Assad's regime.

Egypt, is an overwhelmingly Sunni Muslim country, and it is Sunnis who are the backbone of the revolt against Assad, whose Alawite sect is an offshoot of Shiite Islam.

In the latest fighting, the Syrian Observatory for Human Rights reported, fierce battles swept the northern city of Aleppo and the central city of Homs.

Loud explosions rocked the Old City of Homs and its Bab Hod neighborhood, as the army pressed a siege they have kept up on the two rebel districts for the past year.

Oil prices surged Friday partly in the wake of Washington's announcement on military aid.

New York's main contract, WTI crude for July delivery, added $1.16 from Thursday to $97.85 a barrel, its highest since the end of January. (AFP)